The gas market in Romania is now fully liberalised, a development whose effects are yet to be seen.
Beginning on 1st July, the domestic gas market in Romania has been completely liberalised, something that should normally lead to an increase in competition and a decrease in prices. Household users are yet to feel these benefits, given that the big suppliers haven't changed their offers, notes the Romanian news agency Agerpres in its analysis of this market. Theoretically, Romanian clients have had the possibility to change their gas supplier ever since 2007 but very few have done so because there has been a minimum regulated price established by the Romanian Energy Regulatory Authority. This system no longer exists as of 1st July, and household users can now survey the market and choose the best offer.
Agerpres warns, however, that the liberalisation comes at a time when the energy supply market is in effect divided among very few suppliers, with two companies supplying 90% of household users. These companies have sent their users offers that contained the same price as before and, unless they receive an answer, the offers in question apply automatically. The authorities are saying, however, that tariffs for the population should decrease, because the gas intended for delivery in the second part of the year is traded at lower prices on the stock exchange markets.
A week ago, the Romanian energy minister Virgil Popescu said the population should pay 10-15% less after liberalisation. He also said he was slightly disappointed with the response from suppliers, especially the big companies who hold a very big share of the market, who, he says, have tried to take advantage of the fact that Romanians are averse to change and perhaps not very well-informed. The minister warns that if the big suppliers do not lower their prices, the competition law in force allows the government to intervene on the market for a period of six months.
The representatives of the Romanian Energy Regulatory Authority also admit that it will take some time for users to feel the effects of the liberalisation on their budgets. "The liberalisation will have positive effects for household users, even if not exactly starting tomorrow, on this market dominated by a small circle of providers", said Zoltan Nagy-Bege, the vice-president of this regulatory body. It remains to be seen what happens next considering that more than a half of people in Romania haven't even heard about the liberalisation of the gas market, according to an opinion poll published recently.
Moreover, a gas supplier from the domestic market has poured cold water on the authorities' enthusiasm, saying there aren't big amounts of gas available on the market at reasonable prices and for the long term for the population's gas bills to decrease as of 1st July. This statement was described by the energy minister Virgil Popescu as "somewhat arrogant". Certain providers are abusing their dominant position and refuse to lower their prices for end consumers although they are buying gas from producers at much lower prices, the minister explained.
The electricity market will also be fully liberalised in Romania starting next year. (CM)
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